$4 Gas = end of eBay and Walmart

There has been a lot of talk lately in the financial community about how manufacturing jobs are now trying to move back on-shore because the high fuel costs have made it more expensive to ship from overseas than it is to pay decent American wages. A lot of other energy industry analysts are saying that gas will hit $6.00/gallon by this time next year.

What Wall Street and the rest of the analysts have completely overlooked is that two of their darling investments will simply cease to exist once gas hits $6.00/gallon. Those two investments would be eBay and Walmart.

eBay is the world’s yard sale. Granted it is full of thieves and con artists which eBay does absolutely nothing about, yet it has somehow survived. It has even managed to survive becoming the largest stolen items fencing operation on the planet. On any given day you can find more pirated entertainment media sold on this site than a New York street corner, yet eBay has survived. Why? Because a lot of people don’t care if an item is stolen or pirated, as long as it is cheap. eBay even went so far as to try and make money off the criminals with their PayPal shipping. Basically a scam which provides virtually no service, yet doubles the postal charges for anything shipped. Nice ethical markup eh?

Many eBay sellers have been asking for more in shipping than what it will cost to ship plus the price of the item for years. This is a time honored scam which is about to come crashing down. UPS, FedEx, and the Post Office have all been hit hard by $4.00 fuel. There is now more than a $2.00 difference in shipping charges to ship a book Priority Mail when you use your own shipping package instead of a flat rate box which lets the book slide around. There is now talk from all of the main shipping companies about about quarterly and weekly price adjustments for all small package shipping. It’s not really greed on their part, the trucks they use get around 6 MPG and there aren’t more fuel efficient models out there. We won’t speak about how much fuel their planes take.

This brings us back to the “cheap” factor and eBay. Pretty soon, if it hasn’t happened already, everyone and their brother is going to start paying attention to the shipping charges on an auction. Once that happens, eBay’s business will vaporize. I used to buy a good deal of things on eBay. Hell, I even bought a Jeep on eBay and had it shipped cross country. Wouldn’t do that today. Nine times out of ten it is cheaper for me to buy what I want in a local store paying both for the round trip gas and the sales tax. $4.00 gas has taken the “cheap” factor away from eBay. It cannot survive $6.00 gas.

Walmart: the last bastion of the anti-christ. This corporation’s list of sins makes the Chinese government look like Mother Theresa. They have enslaved multiple generations of Chinese citizens in their off-shore “company towns”. Those people will never know freedom or prosperity. Anybody who has ever watched the documentary “Walmart – The High Cost of Low Price” will never spend another nickel in that God forsaken place. There can really be no more un-American corporation on the face of the planet.
Be that as it may, Walmart has managed to rape, pillage and plunder its way into Wall Street’s heart. It did so by screwing every company insane enough to sell product to them, and by building its own knock-off factories in China using slaves as labor. (We won’t even mention the illegal alien cleaning crews they’ve been convicted of using here in this country.) Why did the building of off-shore slave operated factories work for Walmart? Because shipping was cheap. Back when gas was around $2.00/gallon it was cheap to pack a ship full of cargo containers and push them across the ocean. Now the push costs more than buying the real product from the real manufacturer at a retail chain which pays a living wage.

Diesel fuel is quite a bit higher than gas. Even today as gas dipped just below $4.00/gallon it was at least 80 cents higher. For some reason as the price of gas goes up, the spread between diesel and gas increases rather than remaining constant. When gas is $6.00/gallon, diesel will be over $9.00/gallon if the spread continues as it had.

Walmart’s ace in the hole has always been the throngs of off-shore slaves they keep in their company towns. Now those company towns are about to become their greatest burden. Walmart will have to actually try making nice with the thousands of suppliers it has screwed over the years. It will have to compete with K-Mart and Target who somehow have managed to avoid screwing those same vendors, or at least didn’t screw those vendors nearly as badly as Walmart did. It is highly unlikely any of those vendors are going to bother doing business with Walmart again. If they do, Walmart will be paying more for the same products than Target and K-Mart are. Because of this, when gas hits $6.00/gallon, Walmart will go out of business.

This entry was posted on July 30, 2008 at 3:26 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or trackback from your own site.

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